good morning. it's monday, may 13th. i'm angela miles. in today's first look: the stock market will try again for new records. stocks locked in a third week of gains friday, it's on! the president stands firm as the house votes for an estimated 37th time to repeal "obamacare." in today's cover story, fed chair ben benanke says it's high time to break up banks that threaten the economy. plus, weight watchers tips the scales for our featured stock picker. and, hot new diy products for men and women in tool belts. first business starts now! you're watching first business: financial news, analysis, and today's investment ideas. good morning. it's monday, may 13th. i'm angela miles. in today's first look: the stock market will try again for new records. stocks locked in a third week of gains friday, with the do in record t.

gold and oil both lost ground. the jpmorgan chase board of directors reportedly 'unanimously' back jamie dimon as chairman and ceo. they say "it's working." shareholders vote may 21st. and the treasury reports a $113-billion surplus. it's the largest surplus since april 2008. the treasury secretary says the nation won't hit the debt ceiling limit until labor day. mark sebastian of option pit mentoring joins us now. mark, what do you think will be most critical to traders this week? - i think we are going to have to be watching currency. the yen is plummeting, and if that thing gets a lot weaker, it's going to start to have a material effect on u.s. assets pretty quickly. - members of the g-7 talked about the yen at a meeting over the weekend. what would be your trader play today? - you know, i think you really

have to watch how the relationship of treasuries and the stock market works. the stock markets continue rallying because there are traders chasing that yield. as treasuries start to weaken, that play between s&p 500 yield and treasury yield is going to start to make a lot less sense, and you may see the traders and banks start to invest in treasuries and notes rather than the s&p 500. - once again on friday, tesla was in overdrive. mark, it has been a long time since we've seen a move like this. do you buy or stay away? - this is an absolute stay away. if you look at the way the volume is spiking, this has been a really hard-to-borrow stock. i think looking at the squeezes, the short squeezes, i think this thing is going to be trading with a 6-handle by the end of the week, possibly a 5- handle. so, i would absolutely give this the hands-off treatment. - what stocks would you buy?

- i think technology is going to continue to lead, the way it has the last couple of weeks. the nasdaq 100 was the clear laggard for the first quarter. i think it is going to lead through the end of the second quarter, and that's where i'm going to be playing. - mark, thanks for your help today. - thank you. it's a battle of the wills on the hill. for an estimated 37th time, congress is taking up a vote today in an attempt to repeal "obamacare." gop leaders claim it's intended to give freshman representatives an opportunity to voice their choice. president obama is firing up his camp. on friday, the president accused healthcare opponents of telling tall tales about the law. and, although he admits there will be mistakes and hiccups, the president says he stands 100% committed to getting the new health law right. the irs is saying sorry for targeting conservative political groups, and senator mitch mconnell wants an investigation. an irs official says organizations using words including "tea party" or "patriot" in their applications

to gain tax-exempt status were singled out. in some cases, the groups were asked to show their list of donors, which violates irs rules. the white house says the action was inapproriate. in our cover story, federal reserve chairman ben bernanke says the u.s. central bank is on the lookout for signs of excessive risk-taking - in short, reducing the chances of a too-big-to-fail bailout anytime soon. "it's very clear that for our financial stability we eliminate 'too-big-to-fail.' i believe that entirely." one way to do that, ben bernanke told a chicago banking conference, is to watch closely for excessive risk-taking in the first place. another way is to measure not by size, but by amount of capital put up. "rather than say banks can only be such and such big, they should have to put more and better quality capital up. that would make them safer and also reduce their funding advantage."

william isaac, chairman of fifth third bank, disagrees. "i think we need to eliminate the disparity ratio between big and small banks. the issue should be 'how risky are you?' that should determine how much cap you should hold." bernanke says the fed is also trying to do a better job identifing asset prices above the norm - "bubbles" - before they threaten the economy - bubbles, as in "housing," that burst nearly six years ago. but the fed stimulus policy, called qe 3, which includes maintaining exceptionally low interest rates until hiring picks up, still has a lot of critics. "right now, it's hurting banks. they can't get the spread to attract capital." but bailing out failing banks has few friends.

"it's a huge deal. it's a blank checkbook, if you will, and that really weighs on the taxpayer, the trader and the investor." traders concede that the fed's stimulus policy has kept inflation at bay, but for how long? they say the price of crude oil is inching higher and may signal the beginning of an inflationary period. the way americans bank may have a direct effect on how much money they are able to save. consumer confidential columnist jennifer waters joins us now. jen, the new theory is, people should have one bank at a time. will it work? - that is what they say angela, that it will work. if you have one pot of money, and you are just looking at that one pot all the time, that you will be less likely to spend than if you have it spread out among a bunch of different accounts. this is the potato chip theory. you have one big bag of potato chips, you are not likely to eat the whole bag. you've got a bunch of smaller ones, you might pick away at them all until there is nothing left. it is that same idea. it's all the mental math. - is there research to back this up? - this comes out of professors at the university of kansas and the university of utah, who

really did a study kind of based on fuzzy thinking, which has to do with children's developmental capabilities, and came out with this theory saying, you just need one account. don't be looking across a bunch of different accounts every day. - thank you, jen. good information. it seems that no matter what the u.s. postal service does to cut and consolidate, it's not enough to get out from under a congressional mandate to pay in advance healthcare benefits for future retirees, so it's going to raise prices. the folks at the post office have already consolidated 60 processing plants and cut the workforce by nearly 5%. but the agency still lost $1.9 billion in the second quarter - that's down from $3.2 billion a year ago. so what's going to go up? postage for first class mail, newspapers and magazines. by how much, and precisely when it'll happen, hasn't yet been determined. dell takeover attempts continue with what some anaylysts say amounts to "extortion." in the latest round, carl icahn and southeastern asset management threatened a proxy fight if the board doesn't approve their plan. the plan allows shareholders to choose between

$12 per share in cash or $12 worth of additional dell stock. analysts tell marketwatch.com it sounds like a threat to sue. icahn tells reporters it's better than the $13.65-per-share buyout proposal from michael dell. shares traded up 1% to $13.45 labor groups in the u.s. are calling for safer working conditions in bangladesh. following the factory collapse that killed more than a thousand workers, the international labor rights group started a petition against gap, walmart and h&m to make immediate safety improvements. union members protested at gap stores in several cities over the weekend. a gap spokesperson says the retailer has been willing to participate in discussions regarding factory conditions for two years, and is launching investigations. a criminal investigation is under way into the deadly explosion at a fertilizer distribution plant in west

texas. friday, bryce reed was arrested. he's an emergency volunteer who was one of the first responders to the disaster. reed was taken into custody for possession of a destructive device. 14 people were killed in the april 17 fire. north dakota ranks number one in the u.s. for deaths on the job, according to a study by the afl-cio. it's followed by wyoming, montana, alaska, and arkansas. the safest states include new hampshire, rhode island, washington, connecticut and massachusetts. death tolls are prevelent in states with mining and oil industries that have more risks of injuries and illness. the study by organized labor says other worker deaths happen because undocumented workers are afraid to speak up about safety. talks are off - again - between caterpillar and the steelworkers' union in wisconsin. the union wants caterpillar to offer pay raises in its new contract. employees rejected a contract last week that froze wages for six years. talks between the two resumed wednesday but quickly ended.

both the company and the union want to continue discussions, but none have been scheduled. a new study shows many homeowners are confused when it comes to their home insurance plans. insurancequotes.com finds that about half of homeowners believe costly damage from mold or earthquakes is covered when it's actually not. laura adams of insurancequotes.com says these assumptions can be extremely costly. thousands of innovative new tools are coming onto the market to spruce up your home. bill moller gives a glimpse at the the 68th annual hardware show that just wrapped in las vegas. more than 27,000 industry professionals came to the national hardware show this year. sure, there's the latest in mundane things like painter's tape and the new- fangled hose with the quick change super nozzle. but what's this? a folding dumpster. we

asked tom kritler, home improvement specialist and host of the radio show the money pit, to be our guide and explain. "it kind of looks like a tarp in a bag. you unfold it and you can put up to 3300 pounds of material in it. you call waste management and it's gone in a snap with one call." then there is the latest in wall plates. white and almond are so passe. these can fit the mood or the person who happens to occupy the bedroom. "so imagine you have a baby's room. then it becomes the big kid's room. then it becomes the

home office. you can keep changing the covers of the lights and outlets through that whole process." soon you will be able to buy industrial-strength carbon air filters for your home. and this is the first do-it-yourself centralized water filter system. "so no longer do you need to have those little filters at the faucets. now you have a filter that will filter all the water that comes into your home from one central point with a filter that's a do-it-yourself install that lasts 12 months." most of the new products at the show will be on store shelves by the end of the year. still to come, don't knock the little guys. why small-cap stocks could be a good go for investors. that's later on. but first, the quick trick some companies are employing to reduce or eliminate federal taxes. bill moller is back after the break.

this may seem a little startling: a growing number of u.s. companies are doing something very simple that affects the rate of taxes they pay. they are declaring to the irs that they are no longer just an ordinary corporation, but a special real estate investment trust or reit. poof! in doing that, their federal taxes are greatly reduced, even eliminated. robert o'brien runs the real estate practice at the accounting and professional services firm deloitte. so,

what kind of companies are doing this? - typically companies that have a lot of real estate assets. - i looked at a list. there's a lot of casinos, prisons... - prisons. billboard companies. data centers. document storage facilities. those types of companies. - robert, it looks like they're trying to do an end run around paying taxes. but you say there are real legitimate reasons to declare yourself a reit. - you know, one of the reasons these companies are really interested in it today, and we've seen a real uptick today, is around cost of capital. there are a lot of investors out there seeking yield, and looking for less correlation with the broader stock market. and reit stocks have been very popular with investors over the past couple of years. - if more and more companies do this, you know that there is going to be talk of maybe changing the tax code. are those mutterings already beginning? - certainly there is broader discussion around changing the tax code. so, with those broader discussions around the tax code, there is always going to be a discussion around the

reit exception. - yeah. how about traditional reits? are they concerned if that discussion starts really heating up they could potentially lose their tax- advantage status? - well, you know, some traditional reits were nontraditional reits 10 or 15 years ago: healthcare reits re yes, they are concerned. they don't want to see anything too esoteric or out of the woods happening that might impact the broader reit industry. - and it's not really as simple as maybe i stated it at the beginning. there is a whole procedure. there is a lot to do to change your declaration. - there is a lot to do. because you have to qualify as a reit. and that means you have to have 75% of your assets, simply put, need to be real estate. 75% of your income needs to be generated from real estate assets. there are strict tests to comply with a reit, both upfront and ongoing. - and reits have been around a good number of decades. - 50 years. - yeah. a new application. maybe we will be hearing more about this from robert o'brien from deloitte. thanks so much. - thank you, bill. still ahead, is a weight loss program ready for a big gain on wall street? we'll get insights, next.

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we are on the hunt this morning for small-cap stocks that may turn into large profits. here to lead the way is kevin bernzott, founder of bernzott capital advisors. good to have you here this morning, and you bring three stocks for us. - thanks for having me, angie. yeah, i would like to talk about mistras group. - what exactly do they do? - well, symbol mg on the new york exchange. and they are in the non-destructive testing business, and you might almost

say quality assurance for critical infrastructure. - how has this stock performed, and where do you see it going? - the stock, lately, has not done well, which is why we think it's an opportunity. if you own the nuclear power plant, if you're that utility, you might want to know if one of the turbine blades is about ready to crack. that's the type of service they provide. the mistras employees imbed right there with the utility employees and provide that type of assurance. - you also have weight watchers on your list, and this stock is down 44% for the year. - weight watchers is down big time. their super model spokesperson- - jennifer hudson. - well, the new one, jessica simpson- - jessica simpson. - aired in the fourth quarter. the commercial started airing, and jessica was pregnant. who knew? so, not gonna have a big weight loss story there for them to tell. but long-term, investment thesis remains

intact. a lot of opportunity. the stock has room to run. - it actually recently bounced over the past five sessions or so, sotors clearly e what you see. moving on to one other stock, clean harbors. what's happening there? - clean harbors. they're the folks that, if you're british petroleum, for example, and you've got an issue, well, they are the guys that can help you out with that. we like the fact that they have about 70% of the hazardous material incineration capability in the country. pretty high barriers to entry there. the local planning commission is not going to let you build one of those on the west side of town, for example. strong cash flow, good opportunity. - thank you for your stock picks. i hope you come back again. - thanks. thanks for having me. just ahead in chart talk, the retail stock one trader wants to buy and hold.

major retailers report in with earnings this week. andrew keene, president of keeneonthenmarket.com, is here now to shop for stocks for us this morning. and let's start with wal-mart. i think of this stock as a buy and a hold. - i think it's kind of a buy- and-hold. i think there's a better chance that it goes up on earnings than down on earnings. we are going to get a good gauge of how they are doing with their international growth, and also how they are doing with e-commerce. they have been trying to push out their e- commerce a little bit. trading around $77.50. it gets up to $79, it has found sellers many times. $80 is a round number. if it breaks through $80, it is off to the races up to $88. i want to see how it performs. i might put on a small bullish position in earnings, with a tight stop. - just to break this down, if traders and investors start to see it above $80, then you say just hang on, right? - if it breaks $80, it is going to $88. - very good. all right, moving on to macy's, what do you see in the charts for this one? - macy's is very interesting.

it has almost gone parabolic. it is straight up. it is on a 52- week high of $47.30. i don't like to be a buyer of stocks on a 52-week high. i don't want to be the last guy holding the chips. they report earnings, it should be a good but interesting gauge. maybe the cold weather might slow down some of their stores. it seems like j.c. penney actually might be turning the corner a little bit. it could hurt macy's a little bit. a 52-week high in gmcr, or tesla, or first solar, that's one thing, because they have such a huge short interest. i want to be a buyer in this, but i want to be a buyer on a pullback, not buying the 52-week high. so i want to get in at around $45, $45.30. i'll have a stop under $41. so, hopefully does pull back on earnings a little bit, then i will jump in to the long side. - thank you, and have a great trading day. - thank you. that's it for today. coming up tomorrow, ivy league universities are selling positions in treasuries. what average investors can learn from that move. from all of us at first business, make it a good monday.

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